Pre-gaming the upfronts, ESPN touts digital chops to shops

To hear Rex Ryan talk football to a room crammed with enthusiastic young people without once uttering the word "fuck" is like filing out of a Springsteen concert and realizing the band never played "Born to Run." On this cool spring day in New York, the merrily profane former NFL head coach has scrubbed his speech of any corrosive elements, this despite the efforts of the guy in the audience who tries to goad Ryan by invoking the Butt Fumble.

It's Wednesday, March 28, and Ryan is perched on a Lucite chair on the third floor of IPG Mediabrands' Herald Square digs, where he's joined by fellow ESPN football insiders Trey Wingo and Dan Graziano. While the panelists are for the most part fixated on the mechanics of next month's NFL Draft, most of the Magna staffers in attendance are more interested in Ryan's tragicomic tenure as head coach of the New York Jets. Asked about his immediate reaction to the Thanksgiving 2012 play in which Jets quarterback Mark Sanchez coughed up the football after sprinting headlong into the rear end of 305-pound right guard Brandon Moore, Ryan is quick to censor himself.

"Me being me, let's use the beep right now, and several times over," he cracks to an audience of media buyers. "Because it was like, 'What are you doing, dude?' I mean, oh my goodness!"

Perhaps it's his Disney media training at work—the Buffalo Bills let him go at the end of the 2016 season, and Ryan is now about a year into his gig as an ESPN analyst—or maybe his time away from the gridiron has mellowed him, but whatever the case, Ryan's PG-13 persona refutes the platitude about old dogs and new tricks. And in that sense, he's a perfect, if unlikely, ambassador for a traditional TV network looking to set a new course before it collides with concussive force into the oversize and unforgiving backside that is the digital revolution.

As it happens, this daylong confab marks the first time ESPN has prefaced its May upfront presentation with an agency house call. In a bid to remind ad buyers and planners at Magna, UM, Initiative and other affiliated Interpublic Group agencies that ESPN's reach extends far beyond traditional TV, Jennifer Hoffnagle, VP for multimedia sales, and her team have supplemented the afternoon's trio of panels with a series of exhibits. Spread throughout Magna's spacious floor plan, they allow attendees to interact with the redesigned ESPN app and get an early look at the new direct-to-consumer streaming service ESPN+.

There's also a VR tour of ESPN's new studios in Manhattan's South Street Seaport, the staging ground for the network's new morning show "Get Up!" Heisman Trophy winner, Super Bowl XXXI MVP and "College GameDay" analyst Desmond Howard tried on the necessary Oculus Rift headset for a virtual walk-through of the riverside studio complex shortly after his morning panel wrapped.

While the ESPN-Magna event serves as a place setter of sorts for this summer's upfront negotiations, at no point does anyone on either side start bandying about the prosaic acronyms that are the lingua franca of June. There is no talk of GRPs or CPMs or KPIs or C3 or even C-3PO, despite the cozy corporate relationship between ESPN and the Disney-owned "Star Wars" franchise.

"This is a more intimate setting to allow our partners to have a better feel for not only our college football, NFL and NBA products, but some of the things we're going to be launching in a few days as well," says Hoffnagle. "So they can actually touch and feel and get immersive with our reimagined app, and therefore be better able to have a conversation about what we can offer with the platform. A lot of times when you have a presentation, it's less a conversation than a one-sided monologue. This allows for more of a back and forth."

One of the advantages of putting on a show at the Magna offices is that such a friction-free presentation (free catering!) all but assures a solid turnout by the agency's more demographically desirable buyers. Which is another way of saying that there are an awful lot of fledglings hanging around on the third floor at the moment. In fact, many of the buyers are young enough to make anyone who's aged out of his/her 30s feel like something that went terribly wrong at the taxidermist.

Over the top

Of course, it's the digital natives who in the course of the next several years are going to shape the evolution of media. "The audience here probably spends the right amount of time with ESPN from a linear perspective, but if you take a look at all of the things we have laid out here, there's a lot more to it than the TV part of the platform," says Wendell Scott, senior VP for multimedia sales at ESPN Customer Marketing and Sales. "Folks are digitally engaged, and I think that is particularly apparent when you're talking about the NBA, which of all the major sports is probably the youngest, the most multicultural and the most inherently social."

Live sports will continue to fuel ESPN's business across all platforms, but as Rob Temple, senior VP of sports marketing, notes earlier in the day, a good deal of the company's investments will be used to accelerate the growth of the ESPN+ service.

"There will be announcements that I know are coming this spring and summer, rights agreements to fuel our direct-to-consumer product, along with a lot of other original content and live events," Temple says, presaging the May 8 deal that will give ESPN+ the rights to exclusively stream 15 annual UFC events for $150 million per year.

It's worth noting that ESPN doesn't imagine that the new streaming service will offset the network's losses of linear TV subscribers in any meaningful way, or at least not in the near term. For one thing, the industry-wide degeneration of cable-customer numbers shows no sign of stopping.

According to Nielsen cable coverage estimates for May, the ESPN flagship is now in 86.3 million homes, around 72 percent of all U.S. TV households and down 12 percent from 98.3 million homes in May 2013. (Also worth noting: With an industry-leading average carriage fee of $7.86 per subscriber per month, ESPN in 2017 booked around $8.2 billion in affiliate revenue, a figure that does not include the contributions of spinoff nets like ESPN2 or ESPNU or the efforts of the company's ad sales team. Despite the subscriber losses, that's 34 percent more affiliate revenue than the $6.1 billion ESPN booked five years ago, when its average fee was $5.13 per sub per month.)

Nor is ESPN+ meant to replace the linear TV channel; rather, it's designed as a supplement for sports junkies who can't get their fix of things like the Canadian Football League, college sports, rugby and soccer. ESPN+ subs will also have access to select out-of-market packages from Major League Baseball and the NHL, plus the aforementioned UFC events and original series like Kobe Bryant's basketball-analysis program, "The Detail," and the complete library of the network's celebrated "30 for 30" documentaries.

The ESPN+ service has been up and running for just about a month, and Disney has not started disclosing its subscriber count.

Opera buffa

A portion of the NFL panel is dedicated to dismissing the chatter of ratings catastrophists.

"We don't have to buy into the narrative that the NFL is failing," says Sean Hanrahan, ESPN senior VP for brand and marketing solutions. He notes that "Verizon just doubled their money and their commitment to the league" while "Papa John's left and in less than 24 hours a new pizza company was in for more dollars."

But the partisan Magna crowd seems more than happy to sit back and listen while Ryan pontificates about all things football. Ryan naturally obliges, and his assessments of some of his former players and the current crop of NFL Draft prospects is absolutely lethal.

After dismissing Oklahoma quarterback Baker Mayfield as "the most overrated guy in this draft," Ryan lays into the luckless Sanchez: "I think he was a really good quarterback for us, but a franchise guy? That wasn't him." He goes on to suggest that the Giants would be "stupid" to trade superstar wide receiver Odell Beckham Jr., before suddenly turning the tables and lashing out at his own sartorial inelegance: "Remember how I used to wear that stupid vest all the time?"

Despite all the laughter that greets Ryan's opera buffa analysis, at no time does he say anything that can't be printed on the front page of The New York Times. This is obscurely disappointing, so I introduce myself after the panel breaks up to see if I might be able to extract some rude language out of him. It takes all of four minutes and 17 seconds to hit pay dirt. As it turns out, the secret is to invoke the New England Patriots. In retrospect, this should've been obvious.

"Whenever we'd play those guys, I'd say to the officials, 'Look, we're going to beat the fuck out of this team,' " Ryan recalls. "Because I wanted them to know that our intention was to kick this team's ass, and we didn't want their guy to get any, you know, preferential treatment. Because sometimes it's, like, 'Hey, listen, that's [Tom] Brady. Different rules apply.' Well, I wanted the refs to understand, I don't care who the hell he is, that wasn't my view of it."

Ryan also had a few things to say about Super Bowl LII ("worst defenses ever"), the L.A. Rams' terrifying twosome of Ndamukong Suh and Aaron Donald ("it's scary the kind of pressure they can put through the middle on ya") and Tony Romo, who went from taking snaps for the Dallas Cowboys to becoming an overnight sensation last season in the CBS broadcast booth. Ryan is not all that impressed.

"Sure, Romo calls a lot of plays ahead of time, but do you know how easy that is to do?" Ryan says with a laugh. "If Romo always knows what's coming, how is it that I used to trap him into throwing picks all the time? Show him one coverage, play another, and he'd throw right into the damn thing!" Coaches have elephant memories. The play to which Ryan is referring to here happened during a Sunday night game back in 2011.

The ground up

Back in November, during a private walk-through of the South Street Seaport studio, Bill Wolff, VP for studio production at ESPN, told advertisers that the creation of digital content was no longer a secondary consideration. "When you produce a TV show nowadays, it is mandatory to consider the digital components in the producing of the linear product," Wolff said, as marketers got their first look at the space that would house "Get Up!" "We built social media producers into our org chart. So we'll be doing everything from making stuff that is tailored to Instagram and Snapchat and all those places, to republishing material from our show to be consumed in the secondary app market."

While there wasn't a great deal to see inside the studio space (at the time, the "Get Up!" sets were still under construction), many of the ad reps braved the chilly autumn air to take in the view from the facility's roof, a vast acreage of space that looks out over the East River to Brooklyn Heights while the Brooklyn Bridge looms a stone's throw to the north. Wolff had some Letterman-esque stunts in mind for the outdoor space, saying that he was curious to find out how far it is from the rooftop to Brooklyn's Dumbo neighborhood. "I think it's a 3-wood. We will find out," he said. "If Aaron Judge wants to swing a bat and hit a ball into the East River, I will have a camera to record that."

Later that same evening, a TaylorMade rep was seen discussing the feasibility of getting one of the PGA Tour vets who endorse the clubs to take Wolff up on his offer. Wolff would go on to note that one of the key advantages of starting a show from scratch is having the freedom to build recurring "franchises" (Top 10 lists, plays of the day, etc.) around brands.

All of what Wolff said last fall plays into the Magna on-site pitch, but in a sense, it's the ratings for "Get Up!" that really drive home the urgency of getting out ahead of the digital pack. In its first month of production (April 2 to 30), "Get Up!" averaged 271,714 viewers, down 18 percent compared with the year-ago "SportsCenter" deliveries. To date, the morning show notched its highest numbers on the morning after the first night of the NFL Draft, drawing 434,000 viewers and a 0.2 rating among adults 18 to 49.

Back at the Magna event, things begin winding down after the NBA panel wraps. Dani Benowitz, executive VP for strategic investment at Magna, says that while she's been in back-to-back meetings for much of the afternoon, she's impressed by what she's seen of the day's presentation. "It's like show-and-tell," Benowitz says. "It's one thing for our media partner to come in and go, 'We have VR, we have a new app,' but to actually be able to play with it, touch it, see how it works is huge, as opposed to just listening to somebody who gets paid to tell me how great their stuff is."